Crisis at Nvidia: CEO's new extramarital affair comes to light, says newspaper

Nvidia's chief executive (CEO), Jensen Huang, had an extramarital relationship with an executive from the company who reports directly to him, according to five people who worked at the company interviewed by The New York Times.

The information, not previously disclosed, adds a new episode to the crisis involving the businessman, who is also the target of an investigation into possible links with a Chinese executive suspected of espionage.

The executive is Kimberly Powell, 48 years old, vice president of healthcare at Nvidia. Huang, 63, and Powell, who is also married to other people, were seen in an intimate situation at a hotel in San Jose, California, during a company conference in March, according to two of the sources interviewed by the newspaper.

The New York Times claims it has not seen the video that would have recorded the meeting.

According to three people informed about the episode, an employee who witnessed the interaction recorded the scene with his cell phone. Huang's security team realized that the person was filming and removed him from the scene.

He would then have offered a confidentiality agreement, a document that prevents the disclosure of certain information.

The relationship between Huang and Powell was already discussed internally at Nvidia, according to the five sources interviewed by the newspaper. The company's code of conduct guides employees to avoid situations that may generate conflicts of interest, including personal relationships.

The company also states that it promptly investigates reports of inappropriate conduct.

Powell joined Nvidia in 2008 and built a career at the company. In 2016, she was promoted to senior director of artificial intelligence business development and, at the end of 2017, she became vice president of the healthcare area.

She coordinates initiatives that apply the company's chip technology to sectors such as healthcare and higher education, especially in diagnostic imaging equipment.

In March, during Nvidia's annual developer conference in San Jose, Powell gave a presentation on the use of artificial intelligence to advance health and biology. The material presented included illustrations by Huang.

During the event, company executives also attended meetings at a nearby hotel, where the CEO and Powell were reportedly seen together.

Asked by the New York Times on Wednesday about his relationship with the executive, Huang responded: "I don't think you should be talking to me directly." Then he hung up the phone. Nvidia declined to comment on the matter, and Powell did not immediately respond to the newspaper's request for comment.

The new report comes amid the investigation into another of Huang's relationships, this time with Alice Huang, a Chinese businesswoman who, according to American authorities, had acted as a Chinese intelligence agent. She is not related to the CEO, despite their common surname.

The suspicion involves possible risks to Nvidia's information security and the supply chain of advanced artificial intelligence chips. Alice was an executive at Megaspeed, a data center company based in Singapore and one of Nvidia's largest customers in Southeast Asia.

According to the New York Times, the company purchased more than US$4.8 billion in chips from the manufacturer in the last two years.

Megaspeed was also investigated by American authorities, under suspicion of having helped China gain access to advanced artificial intelligence chips whose export to the country is prohibited by the United States.

Since 2022, the American government has maintained restrictions to limit Chinese access to these semiconductors and the equipment needed to manufacture them. China denies allegations of espionage, and Alice Huang did not respond to requests for comment.

In early November, after admitting his extramarital relationship with Alice, Jensen Huang sent a message to Nvidia employees in which he took responsibility for his actions and apologized to his wife and children.

He also stated that he did not live up to the trust placed in him by colleagues, the board of directors, partners and shareholders.

Nvidia announced the opening of an independent investigation, led by a committee of independent directors with the support of external lawyers. The work will be supervised by Wachtell, Lipton, Rosen & Katz.

According to the company, the board has no reason to believe that the company's confidential information or the national security of the United States have been compromised, but the investigation will analyze all available information.

Huang stated that he supports the investigation and will fully cooperate with the process. The company reported that he will continue in his role as CEO during the investigation.

Republican parliamentarians who lead three influential committees in the United States House of Representatives also called on the executive to participate in a closed-door meeting to provide clarification on his interactions with Alice Huang.

The situation increases pressure on Nvidia, one of the most important companies in the global race for artificial intelligence. Founded by Huang and two other partners in 1993, the company has become the main supplier of chips used to train and operate artificial intelligence systems, serving giants such as Microsoft, Google, Amazon and Meta.

The episode occurs at a time of greater caution among investors regarding the artificial intelligence sector and the ability of companies to sustain investments in technology.

Between October 29th and Tuesday (10th), Nvidia lost US$1.081 trillion (around R$6.1 trillion) in market value, according to a survey by Elos Ayta. In eight trading sessions — days on which the exchange operates —, the company's valuation fell from US$5.149 trillion to US$4.068 trillion, a reduction of approximately 21%.

In the last two trading sessions of the period alone, the loss was US$430 billion (around R$2.3 trillion).

The size of the drop exceeds the market value of all Brazilian companies listed on B3, estimated at US$888 billion (around R$4.8 trillion). Nvidia's accumulated loss is equivalent to approximately 1.22 times the value of all these companies combined. It also corresponds to almost ten times the market value of Petrobras, estimated at US$112 billion (around R$605 billion).

The loss recorded in just the last two trading sessions is equivalent to approximately 96% of the combined market value of the three most valuable sectors of the Brazilian stock market: banks, oil and electricity. Together, they bring together 55 companies and are worth US$449 billion (around R$2.4 trillion).

The drop in market value, however, does not mean that Nvidia has withdrawn this money from its cash flow or lost the same amount in its operations.

The indicator represents how much investors are willing to pay for the company on the stock exchange and is calculated by multiplying the price of each share by the number of shares in circulation. When stocks fall, the market value also falls.

In addition to the uncertainties related to the investigations, the episode could call into question Huang's future in charge of the company. For Dan Ives, partner and senior managing director at Yorkville Ives & Co., there is a risk that the executive could be removed depending on the outcome of the board's investigation.

According to him, an eventual departure would increase pressure on the shares, as Huang is a central figure in Nvidia's history and global strategy.

To date, the company says it has no evidence that its corporate secrets have been compromised. The investigations are still ongoing, and there is no conclusion regarding the suspicions involving the CEO.